September 4, 2001

Improvement -- yes. Recovery-- no.

The National Association of Purchasing Management said on Tuesday that its manufacturing index increased to 47.9 in August from 43.6. Of course, the bulls jumped on this news, pushing stocks up.

But don't be fooled. We are still a long way from a true recovery. Although the NAPM index rose, it is still below 50 -- indicating that manufacturing activity, which makes up about one-sixth of the US economy, is still contracting. And it has been doing so for the past 13 months!

So be prepared. The road to recovery will be a long one, with many false starts and forks along the way.

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